Protect Yourself From Magically Rocketing Lending Fees At Closing

Thanks to various loopholes, people shopping for a mortgage can find themselves hit at closing time with lending fees changed dramatically from the initial quote.

To combat this, Jack Guttentag advises asking for the full lender charges in writing before sending in an app. Let the broker or lender know you expect to see them upheld, and, “in most cases, it will be.” — BEN POPKEN

Legal Thievery at the Closing Table [Yahoo Finance]

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  1. thwarted says:

    Thanks. More house-buying stories, please. :)

  2. dieman says:

    Getting that HUD-1 a few days beforehand is always a bonus. Ensure you get yours at least 2 days before closing. Look over it and ensure that it is correctly filled out with the right numbers. Look for strange closing fees (document retrieval fees of $300 are common bullshit) and other nonsense.

  3. mrmysterious says:

    We are getting ready to close on our first house, which we are building in a couple weeks. This is really helpful. I’ve not locked yet but before I lock I’m getting the written list of lender charges and asking that they honor it. Thanks Consumerist! Now if you could just keep me from getting taken on any other aspect of the house!

  4. pestie says:

    Protrect myself? I’m guessing that means I need a protrector?

  5. crayonshinobi says:

    As Dieman said, the HUD-1 is very important to have prior to closing.

    It’s not just a way for the buyer to get taken, but also the seller.

    Imagine you’re selling and something like this comes up for your buyer, causing them to fold. Now you’re left with suing for performance or starting all over again. Either one is expensive and troublesome.

  6. Kornkob says:

    Protrector—- is that the funny looking thing that they made me buy every year for high school? (geeze that was 20 years ago now)

  7. pestie says:

    Kornkob: I tried to find a way to work in a joke like that but couldn’t quite get there. Thanks for helping out. Heh…

  8. rich815 says:

    “I paid $2,240 in lender fees when my loan closed, compared to the $880 I was quoted at the time my rate was locked. It was a total surprise that hit me at the closing table.”

    Sorry, in no way to defend the unscrupulous scumbags out there (god knows there are plenty) but taking people’s words on this kind of thing when often it’s the idiot not understanding in the first place to blame. People see and hear what they want. Likely the lender’s fees were $880 and the rest was title and escrow fees. the proportions are about right. Get it writing, understanding what you’re doing, and also what the fees mean, AND the differences between a lender’s fee, a title/escrow fee AND points (aka discount/origination fees).

    Funny how everyone screams about lender’s fees but few have problems with realtors who know little of what they are doing yet make 5% on each deal.

    In the end realize that shopping just for the best rate is not the best policy. Who would you rather have do your kitchen/bathroom renovation? The guys hanging out in front of the Home Depot who work for chump change or the licensed contractor? Guess who is cheaper? Guess who is more likely to do a crappy job or screw you over in the end? Often, people have only themselves to blame when they get greedy and want the absolutely cheapest, lowest rate they can find. When they find it you can be sure the loan agent is either going to screw you in the end, or if your loan becomes problematic prioritize it (or abandon it outright!) based on how much they are making. Me? I’d rather have a good, fair rate then shop for the absolute cheapest I can find.

  9. SexCpotatoes says:

    um, rich815… obviously you haven’t read the millions of stories about the “licensed scamtractors” working FOR home depot, and horror stories about misordered parts, destroyed kitchens sitting unusable from easter to christmas, etc.

  10. rich815 says:

    Um, SexC, that WAS my point. Not to go cheap (Home Depot, out front, or affiliated with them at all), use a REAL contractor.

  11. flamaest says:


    Many times to close on the loan, many brokers will also tell you that their broker fees can be [completely] deducted at the end of the year on your tax return. This is not entirely true, you can deduct this amount, which can be thousands of dollars, but the deduction amount must be spread out through the length of the entire loan.